“The Kauffman Index: Startup Activity provides a broad index measure of business startup activity in the United States. It is an equally weighted index of three normalized measures of startup activity,” the Foundation says in the 2015 report. First, they look at the number of new entrepreneurs in the local economy as a percentage of the area’s population. We know Austin has a ton of local businesses, but this factor in the index identifies newbies to the Austin business scene.

Second, the Foundation gauges the proportion of new entrepreneurs who chose entrepreneurship versus were forced into it. Simplistically speaking, was an entrepreneur employed before embarking on his or her own? Those who choose entrepreneurship tend to start businesses with more growth potential than those who become entrepreneurs out of necessity.

The third component of this index is startup density expressed as the portion of new employer businesses normalized by population. Companies contributing to this part of the index have employees and are therefore likely more mature businesses than one-person outfits.

The Kauffman Foundation measured the 40 largest metro areas in the US. Here are how the top 10 shook out: